PropLens · Deal Sheet

26 Hay Street, Elgin, IV30 1NQ

Office (Grade B listed) 3,762 sqft GIA (NIA ~3,198) Heritable · Fair
Asking
Offers over £315,000
View on LoopNet
Conventional bid anchor. The building valued as a conventional office let (single or two tenants), the basis a lender will lend against. The operator case (flexible multi-let, already its model) is in multilet.html. Supersedes the earlier single-lens analysis.
Offer range · Income (conventional re-let anchor)
Offers over £315,000
Asking (offers over, VAT-free)
Heritable; sold subject to existing tenancies
Step down −£155,000 · −49% to reach 15% cash-on-cash
£160,000
TargetUpper end · 15% c-on-c hurdle
vs asking
−49%
Step down −£25,000 · −16% to reach 20% cash-on-cash floor
£135,000
Lower end · 20% c-on-c floor
vs asking
−57%
Range £135,000 – £160,000 Bid band · Significant vendor needs motivation to engage

Offers over £315,000 sits about 49% above the conventional whole-building upper end (£160,000). On a single-let lender basis the building does not approach the asking; the gap reflects the listed character, redevelopment optionality, the part-income, parking, and owner-occupier appeal.

Grade B listed: alterations need Listed Building Consent and carry a cost premium. RV £20,250 means ~£10,100/yr rates (no small-business relief), payable on any void.

Stabilised income
£22,000/ yr NOI
£22,000 ERV − £0 op. costs → NOI
Conventional office ERV (~£22,000) across the building (Elgin office proxy, space-type adjusted). Actual part-let income of £25,800 all-inclusive corroborates the rate.
Cost to stabilise
£15,000one-off refurb
Light modernisation, listed-sensitive; building in use
Funded with the purchase — already in equity required on the explorer.

Offer explorer

Your offer
£160,000

Equity required
£0
Lender lends £81,250 against VP £125,000
Cash-on-cash
0%
 
DSCR @ 8%
3.38×
Same at any price
Net cash flow
£15,500
NOI − debt service (fixed)

Lender lens · five ratios

DSCR @ 8% rate 3.38× Strong
Stress DSCR @ 10% rate 2.71× Strong
Debt Yield (NOI / Loan) 27.1% Strong
Yield on Cost 0% Viable
Net Initial Yield 0% Viable

65% LTV · 8% IO · 7% costs · NOI £22,000 · VP £125,000 (lender basis) · Refurb-to-let £15,000 (Light modernisation, listed-sensitive; building in use (EPC C))

Thesis

An attractive Grade B listed Georgian office on a prominent corner in central Elgin, with a classical portico, 12-pane sash windows, nine on-site parking spaces and an EPC of C. It is part owner-occupied and part let to three tenants on all-inclusive flexible agreements producing £25,800 a year. Valued conventionally, as an office re-let to one or two tenants on full repairing terms, the building supports an estimated rental value around £22,000 and a vacant-possession value near £125,000, giving a bid range of £135,000 to £160,000 on the 20% to 15% cash-on-cash hurdles. At offers over £315,000 the asking is roughly half as much again above that anchor: the price is set by the listed character, the redevelopment optionality flagged by the agent, the existing income, the parking, and owner-occupier appeal, none of which a yield investor should fund. The building's real strength, its flexible multi-let model, is set out in multilet.html. This analysis supersedes the earlier single-lens version on the card.

What's wrong with it
  • Listed status restricts alterations and adds cost (LBC); EPC works and redevelopment are constrained.
  • Asking is ~49% above the conventional anchor; only the operator case and non-investment value close the gap.
  • Elgin is a thin office market; full conventional letting of 3,762 sqft to one or two tenants is a tall order.
What's right with it
  • Already income-producing (£25,800 part-let) with a flexible tenant base — not a standing void.
  • Characterful, central, nine parking spaces, EPC C, VAT-free sale: broad appeal and no MEES or VAT friction.
  • Redevelopment optionality (STP) provides an alternative value route beyond office use.
Risks
  • Letting depth: re-letting the whole as conventional space is hard in Elgin; the flexible model is the realistic income.
  • Listed costs: repairs and any alterations are LBC-controlled and dearer than standard.
  • Rates on voids: RV £20,250 → ~£10,100/yr; empty-rate exposure on any unlet space.
DD gaps
  • Tenancy schedule: obtain the three flexible agreements (term, notice, what "all-inclusive" covers) and the owner-occupied area.
  • Listing: confirm the Grade B listing extent and any outstanding repair notices.
  • Redevelopment: pre-application view on change of use / conversion given listed status.
Considerations
  • Redevelopment STP: the agent flags redevelopment potential; a large central listed building with parking has alternative-use optionality (planning + LBC needed).
  • SSAS-eligible commercial: tax-free hold once stabilised (variant below).
  • Loan £81,250 is below typical mainstream commercial minimums (£100k–£150k); cash, SSAS, or specialist lending is the realistic route.
SSAS variant · commercial, eligibleAt 50% LTV the conventional range solves to £125,000 – £150,000 on the same 20% / 15% cash-on-cash hurdles.

Quick facts

Asking
£315,000
GIA
3,762 sqft
NIA (est.)
~3,198 sqft
Income now
£25,800 pa
RV
£20,250
EPC
C
Parking
9 spaces
Lens
Single-let anchor

Headline numbers

Range
£135k – £160k
vs asking
−49% to upper
ERV (conventional)
£22,000
Income now
£25,800
VP (lender basis)
£125,000
DSCR @ 8%
3.38×
SSAS range
£125k – £150k
Operator case
£155k – £185k

Property & Valuation

Facts, condition, comparables, valuation stack, and purchase-cost schedule for due-diligence reference.

Facts

FieldValue
Address26 Hay Street, Elgin, IV30 1NQ
AskingOffers over £315,000 (VAT-free)
TypeOffice, Grade B listed; part-let flexible multi-tenant
Floor area (GIA)3,762 sqft (basement 253, ground 1,967, first 1,330, attic 212)
NIA (est.)~3,198 sqft (office ~2,803 + storage ~395)
TenureHeritable
EPC / Use classC / Class 4 (Business)
Rateable value£20,250 (no SBBS relief)
Income£25,800 pa (3 tenants, all-inclusive flexible; owner occupies part)
Parking9 spaces (rear, off Moray St)
Portal / agentLoopNet / Shepherd Commercial
ListingView listing

Photos

Physical assessment

  • Building: attractive Grade B listed, 2-storey, 3-bay semi-detached mid-19th-century stone building with basement, plus a rear single-storey and attic extension. Classical portico with Roman Doric columns; 12-pane timber sash windows.
  • Ground floor: entrance hall, board room, large office, meeting room, reception/waiting area, plus a rear open-plan office with ancillary facilities.
  • First floor: five office rooms, staff kitchen and WC. Attic provides storage.
  • Layout: highly cellular (10+ rooms over two floors) — already operating as a flexible multi-tenant office, the natural multi-let configuration.
  • Services: gas wet central heating, fluorescent/spot lighting; EPC C (no MEES constraint).
  • Parking: 9 on-site spaces to the rear — a strong asset for an Elgin office.
  • Condition: in use and well-maintained; rated Fair by default. Listed status restricts alterations (LBC for works).

Per-unit income

FloorNIA£/sqftERV
Ground (main)~1,672£8.50£14,200
First (upper)~1,131£7.23£8,200
Basement + attic (storage)~395~£4.25£1,700
(rounding / circulation)−£2,100
Conventional ERV~3,198£22,000

Base ~£10/sqft (Elgin office proxy) × 0.85 Fair; upper floor and storage carved per space-type. Actual all-inclusive part-let income (£25,800) is consistent with this on a whole-building basis.

Yield selection

Commercial ARY 13.5% (Elgin tertiary office, listed; benchmarked above Inverness 9–11% plus the +175 bps sub-£500k adjustment). Term 12.75%, reversion 13.5%. Building part-let on flexible licences, so valued on a vacant-possession (re-let) basis for the lender lens.

Valuation stack

BasisValueWorkings
Gross rack (ERV / ARY)£163,000£22,000 / 13.5%
Vacant possession (VP / MV3)£125,000Rack less re-let void/rent-free/holding
Operator stabilised (MV2)£173,000see multilet.html
Asking£315,000Listed character + redevelopment + part-income + parking

Acquisition benchmark

No Elgin entry exists in the scored benchmarks. As a cross-check, offers over £315,000 over 3,762 sqft GIA is ~£84/sqft, within the "investigate further" band for commercial in a decent area (under £100/sqft). But the income lenses (single-let ~£135k–£160k, flexible multi-let ~£155k–£185k) sit well below that: the £84/sqft reflects the listed character, the redevelopment optionality, the part-income, the parking, and owner-occupier appeal rather than an investment yield.

Purchase costs

ItemAmount (@ £160,000)
LBTT£100
Legal fees£4,500
Disbursements£650
Broker fee (1%)£1,600
Lender arrangement (2% of loan)£1,625
Lender legal£2,500
Surveys / DD£2,500
Total purchase costs£13,475
Refurbish (separate, listed-sensitive)£15,000

VAT-free sale (not elected) — no VAT on price. LBTT minimal at this level. Listed-building works carry a premium and need Listed Building Consent. Empty-rates exposure: RV £20,250 → ~£10,100/yr full rates (no SBBS), payable on any void after the exemption.

Strategy & Appraisal

Value-add angles, holding-structure recommendation, and supporting analyses for the bid thesis.

Value-add angles

Flexible multi-let (current model)Strong
Already running: 3 tenants on all-inclusive flexible terms, £25,800 part-let. Stabilise the whole building. See multilet.html for the operator range (£155k–£185k).
Key risk: Elgin demand depth, but proven by current income.
Conventional re-letModerate
Let to one or two tenants on FRI terms at ~£22,000. Simpler to manage but harder to achieve in a thin market.
Key risk: single large requirement is rare in Elgin.
Redevelopment (STP)Weak
A large central listed building with parking has alternative-use optionality (residential / hospitality), which underpins the asking. Constrained by listed status and planning.
Key risk: LBC, planning, and conversion cost; speculative.

Holding structure

Pure commercial (Class 4) office: fully SSAS/SIPP-eligible, and a pension wrapper suits a long-term flexible-let hold (tax-free income and gains); SSAS variants are shown on each lens. For an owner-operator running the flexible workspace actively, a PropCo/OpCo (pension holds the heritable interest, an operating company runs the licences) is the cleaner structure. The VAT-free, part-income, parking profile also suits an owner-occupier buying via pension.

Tags

Grade B listedFlexible multi-letPart-income £25.8k9 parkingEPC CVAT-freeRedevelopment STP

Sources

  • LoopNet listing (Shepherd Commercial)
  • Shepherd Commercial sales brochure (floor areas, tenancy summary, RV, EPC) — March 2026
  • Scottish Assessors Association — NAV/RV £20,250
  • Revenue Scotland — LBTT non-residential bands
  • Actual passing income (£25,800 pa, all-inclusive flexible lets) — primary multi-let evidence

Jurisdiction

Scotland